Many companies are not on track to comply with new FASB and IASB real estate lease accounting standards set to take effect in December 2018 and January 2019 respectively, according to a just-released Avison Young white paper.

The report titled, “The Big Change to the Lease Accounting Standards – New rules will significantly impact a company’s enterprise value unless firms act now,” found many firms are struggling to collect the necessary lease accounting data in advance.

The paper’s author, Sean Moynihan, said a key change that brings immediate and material impact is a requirement for leases with a maximum term of more than one year to be capitalized; and most importantly, no leases will be grandfathered in.

Avison Young’s Mark E. Rose said, “This white paper emphasizes that there are many things that real estate lessees and lessors can, and should be doing today, with respect to their lease structures, business operations and financial reporting processes.”